DCIT, New Delhi V. M/s. Asha Kumar Agarwal, New Delhi

ITA 3414/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4017 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 28-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: R S AHUJA
• Keywords: Double taxation relief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: F , NEW DELHI BEFORE SMT. BEENA A PILLAI, JUDICIAL MEMBER AND SHRI MAHARISHI PRASHANT, ACCOUNTANT MEMBER ITA NO. 3414 /DEL/201 5 AY: 20 10 - 11 DY.CIT, CIRCLE 1(1)(1) INTERNATIONAL TAXATION ROOM NO.409, E - 2 BLOCK 4 TH FLOOR, CIVIC CENTRE NEAR MINTO ROAD NEW DELHI VS . SMT. ASHA KUMAR AGARWAL C/O YOGI ASSOCIATES, C.A. E - 335, EAST OF KAILASH NEW DELHI 110 065 PAN: ADCPA4605J (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. SURENDER PAL, SR. D.R. ASSESSEE BY : S H. R.S. AHUJA, C.A. DATE OF HEARING : 3 1 .10.2018 DATE OF PRONOUNCEMENT : 02/11/2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST ORDER OF LD.CIT(APPEALS) - 42 , NEW DELHI DATED 09.03.2015 FOR A.Y 20 10 - 11 ON THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND LAW, WHETHER LD.CIT(A) HAS ERRED IN DELETING ADDITION MADE BY THE VOLUMINOUS SHARES TRADING AS BUSINESS IN NATURE AND HOLDING THAT IN THE LIGHT OF CIRCULAR NO.1827 DATED 31.08.1989 OR CBDT, THE A SSESSEE S ACTIVITIES OF SALE/PURCHASE OF SHARES CAN ONLY BE CONSIDERED UNDER THE HEAD CAPITAL GAIN , WHEREAS CONSIDERATIONS ITA 3414/DEL/2015 A.Y. 2010 - 11 MRS. ASHA KUMAR AGARWAL 2 DEALT WITH IN THE CIRCULAR ARE TOTALLY DIFFERENT FROM THE ONES IN THE INSTANT CASE. 2. THE APPELLANT CRAVES TO ADD, AMEND, MODIF Y OR ANY GROUND(S) OF APPEAL AT THE TIME OR BEFORE THE HEARING OF TH E APPEAL. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: A SSESSEE FILED HER RETURN OF INCOME ON 31/07/10 DECLARING TOTAL INCOME OF RS.6,81,400/ - . THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES UNDER SECTION 143 (2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) WERE ISSUED ALONG WITH DETAILED QUESTIONNAIRE. IN RESPONSE TO STATUTORY NOTICES, REPRESENTATIVE OF ASSESSEE APPEARED BEFORE LD. AO AND FILED ALL NECESSARY DETAILS/DOCUMENTS AS CALLED FOR. 2.1. IT WAS OBSERVED BY LD.AO THAT ASSESSEE DISCLOSED I NCOME FROM H OUSE P ROPERTY, S HORT T ERM C A PITAL G AINS AND ALSO I NCOME FROM O THER S OURCES. LD. AO OBSERVED THAT ASSESSEE DURING THE YEAR UNDER CONSIDERATION , ENTERED INTO FREQUENT TRANSACTION OF SALE AND PURCHASE OF SHARES. HE THUS DREW A PRESUMPTION OF ASSESSEE BEING ENGAGED IN BUSINESS OF TRADI NG IN SECURITIES. 2.2. LD. AO ALSO OBSERVED THAT DURING A SSESSMENT Y EAR (A.Y.) 2008 - 09 SIMILAR VIEW WAS TAKEN BY THEN LD.A.O. , WHICH WAS REVERSED BY LD.CIT(A) THEREIN. HE THUS ON THE BASIS OF ASSESSMENT ORDER PASSED FOR A.Y. 2008 - 09 , MADE ADDITION I N THE HANDS OF ASSESSEE UNDER THE HEAD I NCOME FROM B USINESS AND P ROFESSION . 2.3. AGGRIEVED BY ORDER OF LD. AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) WHO DELETED ADDITION MADE BY LD. AO. 3. AGGRIEVED BY ORDER OF LD. CIT (A) REVENUE IS IN APPEAL BEFORE US NOW. ITA 3414/DEL/2015 A.Y. 2010 - 11 MRS. ASHA KUMAR AGARWAL 3 4. LD. SR. DR SUBMITTED THAT ASSESSEE IS A NON - RESIDENT INDIVIDUAL RESI DING IN BAHRAIN , AND IS PURSUING HER TEACHING PROFESSION OVER THERE. HE SUBMITTED THAT ASSESSEE KEEPS VISITING INDIA AND THEREFORE AN ELEMENT OF P ERMANENT E STABLISHMENT ( P.E.) CANNOT BE RULED OUT. 4.1 . HE PLACED RELIANCE UPON THE ORDER OF LD. AO AND SUBMITTED THAT ASSESSEE FREQUENTLY TRADED IN SECURITIES AND THEREFORE INCOME EARNED CANNOT BE HELD AS C APITAL G AINS , INSTEAD IT SHOULD BE I NCOME FROM B USINESS AND P ROFESSIO N. 4.2 . ON CONTRARY LD. C OUNSEL SUBMITTED THAT ASSESSEE HAS BEEN STAYING OUT OF INDIA SINCE PAS T 1983. SHE ADMITTEDLY VISITED INDIA DURING THE YEAR ONLY FOR 43 DAYS AND NO BUSINESS CONNECTION COULD BE ESTABLISHED AS PER SECTION 9 OF THE A CT AND DTAA BETWEEN INDIA AND BAHRAIN. HE SUBMITTED THAT ASSESSEE IS LIABLE TO BE TAXED FOR BUSINESS PROFIT IN BAHRAIN AND NOT IN INDIA . HE ALSO SUBMITTED THAT IN SUBSEQUENT A.YS BEING A.Y. 20 11 - 12, AND 20 12 - 13, NO ADVERSE INFERENCE HAS BEEN MADE IN RESPECT OF INCOME THAT HAS BEEN DECLARED BY ASSESSEE AS SHO RT TERM AND LONG TERM CAPITAL GAIN , ON PURCHASE AND SALE OF SHARES. 5. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES I N LIGHT OF RECORDS PLACED BEFORE US. 6. ASSESSEE BEING AN NRI HAS BEEN INVESTING IN EQUITY AND MUTUAL FUNDS IN INDIA. L D. CIT(A) HAS OBSERVED THAT THERE IS NO BORROWED FUNDS THAT HAS BEEN USED FOR THIS PURPOSE AND THE GAIN/LOSS HAS BEEN DECLARED BY ASSESSEE CONSISTENTLY AS INCOME UNDER THE HEAD CAPITAL GAINS. THIS POSITION HAS BEEN ACCEPTED BY R EVENUE TILL A.Y. 2007 - 08, HOWEVER ONLY FOR A.Y. 2008 - 09 & 2009 - 10 LD.A.O. TREATED CAPITAL GAIN DECLARED BY ASSESSEE AS ITA 3414/DEL/2015 A.Y. 2010 - 11 MRS. ASHA KUMAR AGARWAL 4 INCOME FROM BUSINESS OR PROFESSION. AGAIN FROM A.Y. 2011 - 12 AND 20 12 - 13 ASSESSEE HAD DECLARED INCOME UNDER THE HEAD CAPITAL GAINS , WHICH HAS BEEN ACCEPTED BY REVENUE AUTHORITIES. WE DO NOT AGREE WITH REASONING OF LD.AO THAT SINCE ASSESSEE TRAVELS TO INDIA THERE EXIST P ERMANENT E STABLISHMEN T. FURTHER IT HAS BEEN SUBMITTED BY LD.COUNSEL THAT ORDER PASSED BY LD. CIT (A) FOR A.Y. 2008 - 09 AND 2009 - 10 HAS NOT BEEN APPEALED BY REVENUE BEFORE THIS TRIBUNAL, THEREBY ACCEPTED THE LONG STANDING POSITION TAKEN BY ASSESSEE. 6.1. IT IS ALSO OBSERVED THAT THERE IS NO NEW FACTS THAT HAS BEEN BROUGHT ON RECORD IN ORDER TO DEVIATE FROM THE CONSISTENT VIEW TAKEN BY THE AUTHORITIES FOR A.Y. 2008 - 09 AND 2009 - 10 WHICH STANDS ACCEPTED BY LD.A.O. 6.2. WE ARE THEREFORE INCLINED TO UPHOLD THE OBSERVATIONS OF LD. CIT (A). 7. ACCORDINGLY GROUNDS RAISED BY REVENUE STAND DISMISSED. 8. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMISSED . O RDER PRONOUNCED IN THE OPEN COURT ON 0 2 N D NOVEMBER, 2018. S D / - S D / - (MAHARISHI PRASHANT) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 0 2 N D NOVEMBER, 2018 * GMV ITA 3414/DEL/2015 A.Y. 2010 - 11 MRS. ASHA KUMAR AGARWAL 5 COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA 3414/DEL/2015 A.Y. 2010 - 11 MRS. ASHA KUMAR AGARWAL 6 DATE DRAFT DICTATED ON 01.11.18 DRAFT PLACED BEFORE AUTHOR DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON & ORDER UPLOADED ON : FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.